DO CARBON TAXES KILL JOBS? FIRM-LEVEL EVIDENCE FROM BRITISH COLUMBIA

Deven Azevedo (), Hendrik Wolff () and Akio Yamazaki
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Deven Azevedo: Department of Economics, London School of Economics and Political Science, UK
Hendrik Wolff: ��Department of Geography and Environment, London School of Economics and Political Science, UK

Climate Change Economics (CCE), 2023, vol. 14, issue 02, 1-46

Abstract: This paper investigates the employment impacts of British Columbia’s revenue neutral carbon tax. Using the synthetic control method with firm-level data, we find considerable heterogeneity in employment responses to the policy. We show that firm size matters. In particular, the carbon tax had a negative impact on large emission-intensive firms, but simultaneous tax cuts and transfers increased the purchasing power of low income households, substantially benefiting small businesses in the service sector and food/clothing manufacturing. Furthermore, we find that aggregate employment was not adversely affected by the policy. Our results provide additional insight for the “job-shifting hypothesis†of revenue neutral carbon taxes.

Keywords: Carbon tax; employment; unilateral climate policy; firms (search for similar items in EconPapers)
JEL-codes: E24 H23 J2 Q5 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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Working Paper: Do carbon taxes kill jobs? firm-level evidence from British Columbia (2023)
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DOI: 10.1142/S2010007823500100

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